January 22, 2021

Twin suicide bombings in Tayaran Square in central Baghdad yesterday killed more than 30 and wounded more than 100, the first suicide bombing in Iraq’s capital city in two years. ISIS has claimed responsibility for the attack. While ISIS and other militant groups have been involved in a spate of incidents across the country in recent months, attacks in the capital have been far less common. However, warnings have been escalating about a resurgent ISIS, and further attacks in Baghdad cannot be ruled out. Though the group was officially defeated in 2017, the drawdown of US troops from Iraq, combined with domestic unrest and the economic impact of the Covid-19 pandemic and low oil prices, have created an opening for it to regroup. Also contributing to the precarious security situation in Baghdad is the exchange of fire between Iran-backed militias operating in Iraq and U.S. and Coalition security forces and facilities, including a rocket attack that damaged the U.S. Embassy compound on December 21. The change of administration in the U.S. is likely to usher in large shifts to Washington’s posture toward Iran (including efforts to reengage in a nuclear deal) which could mitigate U.S.-Iran clashes within Iraq, and possibly toward Iraq, as well. Biden’s incoming Secretary of Defense, retired General Lloyd Austin, oversaw the withdrawal of forces from Iraq in 2011, only for the decision to be reversed following ISIS success in overrunning large swaths of the country. Austin was also involved in developing the military strategy that ultimately led to the (temporary) defeat of ISIS. The trajectory of U.S. policy in Iraq is not yet clear, but hopefully President Biden and General Austin’s past Iraq experience will ensure that they not lose sight of the threat ISIS poses to the region, even as the administration grapples with domestic public health and economic issues.

Mexican President Andrés Manuel López Obrador called on President Biden to make good on campaign promises for immigration reform. Indeed, Biden’s number two issue after dealing with the pandemic appears to be immigration. He has already sent to Congress a proposal for comprehensive immigration reform creating a pathway to citizenship for 11 million undocumented immigrants in the U.S. and signed executive orders rolling back Trump-era policies such as the “remain in Mexico” program for asylum seekers and construction of the border wall. Mexico has long wanted U.S. immigration reform, including a path for dual citizenship for Mexican nationals working in the U.S. More recently, Mexico has called on the U.S. to do more to support Central Americans suffering from crime, poverty, the pandemic, and recent natural disasters. This has become all the more urgent, as another caravan of more than 8,000 Honduran nationals crossed into Guatemala this week in their northbound quest to reach the United States. For his part, Biden’s proposed legislation includes $4 billion over four years to Guatemala, El Salvador, and Honduras to address the concerns that are causing people to flee. He has also appointed former U.S. Ambassador to Mexico Roberta Jacobson to coordinate southwest border security policy with the hope of managing these security challenges together with Mexico and Central America. López Obrador should welcome this engagement, even if he also seems concerned about an increased level of American meddling in Mexico’s internal affairs, particularly when it comes to labor laws, the environment, and human rights. The immigration debate in the United States will no doubt be fraught, but immigration reform may open avenues for further cooperation between the United States and Mexico.

President Biden’s quick moves on environmental policy – rejoining the Paris Climate Agreement, cancelling the Keystone XL pipeline, and revisiting a Trump-era rollback of limits on methane emissions in the oil and gas value chain – will spark a short-term backlash but will ultimately make the US oil and gas industry more competitive globally. Cancelling Keystone XL, which was intended to deliver crude from Canadian oil sands to US Gulf Coast refineries, presents a rough start for the US-Canada economic relationship. Canada has long considered the pipeline an economic priority. But the oil market has undergone a fundamental shift since the line was first proposed more than a decade ago, and current dynamics of abundant oil and low prices make oil sands less viable regardless. Furthermore, as wealthier countries develop and implement national climate and emissions agendas, at least some of them are likely to establish emissions standards for imported goods. The EU has proposed binding methane emissions standards for imported oil and gas, and market chatter suggests that other oil and gas importers, particularly in Asia, are beginning to express an openness to paying a premium for “greener” imports. All this points to a global market in which oil and gas produced without environmental accounting and safeguards might be less palatable to the world’s biggest buyers and would thus put exports from countries with lax environmental standards at a disadvantage. If global trends in environmental awareness continue on this trajectory, emissions standards for imported goods may eventually expand to other regions and apply not only to oil and gas, but to goods across the board. Ultimately, a move toward alignment with international attitudes on environment and climate will likely mean better market access for U.S. industries in general.